New Jersey high schools are gearing up for Graduation Day 2018, with a statewide graduation rate well over the national average.
According to the U.S. Department of Education, more than 84 percent of high school students nationwide graduated on-time in 2016. The New Jersey graduation rate for 2017 was 90.5 percent and trending upwards.
Many of these new graduates will pursue a bachelor’s degree, which means students and parents are starting to shiver at the thought of student loans…
Are You Ready to Pay for College?
Some colleges are more expensive than others. On average, a U.S. student spends $8,202 a year on public tuition and $21,189 a year on private tuition. The Garden State’s most expensive college blows these averages out of the water with a $50,725/year price tag.
For most families, funding a college education may require a combination of tactics, including:
- Cashing in the investments or savings built up for college funding
- Reducing current standards of living (i.e. skip vacations, eat out less, etc.)
- Borrowing money
How much of each? It depends on the family.
The first step in funding a college education is to make sure your financial plan does NOT sabotage your retirement plan. Borrowing money to pay tuition is a pain. Borrowing money to survive in retirement is a personal financial crisis.
I wrote a blog post on this very topic called, “Don’t Pay For College at the Expense of Your Retirement.” You can read it here.
Have the “Money Talk” With Your Child
Watching your child tally up his or her pile of ‘graduation checks’ is a perfect opportunity to have an adult conversation about money.
At minimum, college-age students should understand:
- The basics of debt and interest
- The miracle of compound interest
- The dangers of high-interest credit cards
- The difference between debit and credit
- The basics of student loans
- Who pays the bill on the ‘campus swipe card’
- How to make a college budget
- Post-college financial expectations
Money habits form early. Trusting your children with the financial realities of college can be a life-changing learning opportunity.
Hire a New Jersey Certified Financial Planner™ Professional
Financial planning isn’t just about picking the right stocks. It’s about using money as a tool to promote your values and achieve your life goals.
Helping your child earn a college degree is a noble goal. A Certified Financial Planner™ professional will help you figure out a college funding strategy that protects your own financial stability and retirement.
As for the grades…. you’re on your own, kid.